Accounting Information System Assignment

Data Flow of CV. Kusuma Jaya

Expenditure & Revenue Cycle

Lecturer : Josua Tarigan, Phd, CMA, CFP, CSRA, CIBA

Ericka Tanoyo D12170020

Kevin Sutanto K.                    D12170071

November 2018
Petra Christian University
 1. COMPANY BACKGROUND

CV (Comanditaire Venootschap) Kusuma Jaya is a middle sized limited

partnership company. Established by Mr.  Agus Setiawan Kusuma in 1998 the
company developed into CV recently. CV Kusuma Jaya is a trading company which
sell pipes, plastic,hose, and rubber gutters. And currently having a total 25
employees work in the CV Kusuma Jaya.
As for the Organization Structure the 50 employees divided into 3 level of
position with Director, General Manager, and 9 Divisions with each division consists
of
4-5 employees.
2. ACCOUNTING BUSINESS CYCLE

As part of business in the market, CV Kusuma Jaya also apply and do the
Accounting Business Cycle. Some application can be seen in 4 Basic Activities
involved in such as Production Cycle, Revenue Cycle. Expenditure Cycle, and
Human Resource & Payroll Cycle. In this report we will further see the Expenditure
and Revenue Cycle of the company.

A. Revenue Cycle
1) Narative
Sales Admin record all the customer order in customer order book after the
order have been made through salesman or telephone. All of the sales are on credit.
From the customer order book, sales admin will check the stock availability of the
goods ordered. In case that the goods are not available, sales admin will then
request a back order to Expenditure Cycle. In the other side, whenever the goods
are available, sales admin will directly make sales order and ask for a credit approval
from the General Manager.
General Manager will make decision by checking based on  the particular
customer’s outstanding credit amount toward the company. Thereafter the sales
order document is approved, sales admin directly prepare 3 sheets of invoices
(white,red,black) and 3 sheets of packing slips (white,red,black). Those 2 sheets
(white and black) of invoices will be sent to the Accounting Department whereas 3
sheets of packing slips will be sent to Warehouse.
Warehouse will prepare the goods according to the packing slips. Once the
packaging process done, they will hand over the goods ordered along with the 3
sheets of packing slips which is already signed to the Shipping Department. Sales
Department will entrust the red invoices  to the shipping department in an envelope
then hand over the red packing slips to the sales department.  Afterward, Shipping
Department will deliver the goods ordered to customer.
Customer receive all the goods ordered, the red and white packing slips and
the red invoice. The customers will be asked to sign the white packing slip.
Thereafter, the  Shipping Department will return to the office with the white packing
slip and give those slips to Accounting Department in order to check the Receivable
Status Report.
When invoices reach the maturity date, Accounting Clerk will produce Account
Receivable Correction List. The account receivable correction list and the first sheet
invoices will be given to the Collection Department in order to bill the customers.
Cashier make a Cash Inflow Validation and subsequently transfer the
payment/deposit to the bank.
The Accounting Department then check the red and white packing slips also
the  invoices which are received by the Sales Admin. They also process the Sales
Journal, update the Receivable Ledger and the inventory stock. Once the billing
process is completed, Accounting Department will process the Cash Receipts
Journal.
 The example of invoices by Kusuma Jaya

The example of packing slips by Kusuma Jaya

2) Context Diagram

Bank
Bank
Statement Deposit
Slip
Customer Order

Back
Packing Slip
Orders
Revenue Expenditure
Customers
Cycle
Invoices Receipt of
Goods

Payment
3) Data Flow Diagram

Expe ndit ure

Cycle

Ba ck order

Orde rs 1.0
Sales Order
Entr y

Packing
Custome r Sales Order
SLips &
Invoices
P aym ent

In v o ic e s
2.0
Shipping
Invoice 1 &
Packing Pa cking Slips
Slips
3.0
Billin g
Invoice 2

5.0 Cash Journal

4.0 Deposit Bank Statement Acco unting
Debt Bank Processes
Collections
Sales

Inventory AR

4) Flowchart
Expenditure cycles
1) Narrative
The Accounting Department hand over the stock availability report to the
General Manager. Whenever the stock reach the reorder quantity level, General
Manager command for do the repurchase order to Purchase Admin by emailing the
preferred Supplier.
The Supplier soon deliver the goods along with 2 sheets of packing slips.
Warehouse then verified manually the goods received by matched with those 2
packing slips and  those packing slips which already been signed will be sent to the
purchase admin. Once the Purchase Admin already ensured that packing slips in
accordance with the purchase order, they will sign those delivery order. Accordingly
with the first sheets to Warehouse which is later will be given to the Shipping
Department and the second sheets to the Accounting Department.
As the time to pay for the goods ordered, supplier will send in the purchase
invoice. Purchase invoice will be accepted and checked  by the purchase admin.
Thereafter, those purchase invoices will be forwarded to the Accounting Department
where those invoices will be matched with the packing slips from Supplier.
Afterwards Accounting Department will send out the purchase invoice along with the
packing slips to the Cashier. Cashier will create the Cash Disbursements and the
General Manager will transfer the payment to the supplier
By the time Company receive the goods ordered, Accounting Department will
check the packing slips no 2 from the Supplier which is received by the Purchase
Admin. The Accounting Department process the Purchase Journal and the
Payables Account. Once the process completed, Accounting Department then
update Cash Outflow and the Accounts Payables Account.
Sales Invoices from one of the supplier

Packing Slips from one of the supplier

2) Context Diagram
Accounting
Department
Repurchase
Packing Goods
Slip/Invoices Warehouse

Goods Receipt of
Supplier Expendit goods
Revenue
Ordered ure Cycle
Purchase Orders Back Cycle
Orders
Payments
3) Data Flow Diagram

Accounting
Department

Pu rcha se
requisiton

Purcha se
Order
1.0
Revenue Cycle Supplier
Ordering

Back Order

2 .0
Warehou se
Receivin g
Supplier
invoices

Transfer Accou nts

payment Pa yable
3.0
4.0
Supplier Verifying supplier
Pa yments
invoices
General Ledger

In ventory

Voucher
Pa ckage
 4) Flowchart

o
3. THREAT & CONTROL
 Threats are inevitable things in every company including also in CV Kusuma
Jaya. Here are some good control which is in practiced in Expenditure and Revenue
Cycle in the company.

A. Revenue Cycle

1. Sales Admin try to make sales as many as possible in every period

in order to gain greater amount of bonus. However, they tend to pay less
attention about the customer availability in paying the debts. Plenteous
amount of profitable sales recorded but merely can be paid back by the
customer which resulted in an unpaid account receivable adding up loss for
the company.
Therefore to reduce this kind of threat CV Kusuma Jaya implemented
segregation of duties between the sales admin and the one who give
authorization to the sales order which is the  General Manager.

2. The Revenue Cycle already functioned properly by the Sales Admin,

General Manager, Shipping Department, Warehouse, Collection Department
and also the Accounting Department. And for each department is consisted by
different employee.
Hence they can do checking in  other departments work and correct for
every mistakes done by the other departments to avoid wrong records.

         3. Possibility number of cash theft can be reduced since with the
implementation of segregation of duties between the employee who handles
payment from customers (Collector and Cashier)  and the other employee
who update the account receivable ledger ( Accounting Clerk).

4. Failure to bill may be highly potential in trading business. However

CV Kusuma Jaya attempt to do segregation of duties between shipping and
billing functions. The one who do the shipping is Shipping Department
whereas the one who bill the customers is Collection Department. This is
crucial because whenever billing and shipping function is done by the same
 employee, they can easily manipulate business activities for instance send the
goods to the other person without billing them.

B. Expenditure Cycle
1. Before CV Kusuma Jaya make a transfer payment to the Supplier, the
Accounting Department will process the voucher package to all payment.  As
a result, the double payments to the supplier can be reduced.

2. Purchase requisition must be made through the approvement of General

Manager. Thereupon, Accounting Department could not purchase a not
needed goods because it will create excess inventory which lead to increase
in inventory holding cost.

4. Suggestion
           With the experiences in the business field, CV Kusuma Jaya has
implemented great practices in their business especially in their business cycle and
control improvement. However, with some other practices in the business market
right now, CV Kusuma Jaya can do some new things to be implemented as seen
below.

1. CV Kusuma Jaya better to improve their ordering process. The usage of book
in recording the customer orders is too old fashioned and have many
drawbacks. One of the major drawbacks is the whole data of customer order
will be gone whenever one of the salesman actioned carelessly and  lose the
book. Moreover, the usage of book could increase the probability of the sales
person to input incomplete data according the customer which can lead to fail
in shipping and billing activities. CV Kusuma Jaya ought to switch from the
old fashioned way of recording customer order to the computer system to
generate customer sales data.        For not only the computer offer more
convenient and flexible to use and operate but also the data loss probability
will be less. Furthermore, computer can be embedded with sophisticated
data input control such as a field check, a completeness check, a validity
check, and many more so the chance of wrong data inputted can be
alleviated.
2. CV Kusuma Jaya still accept payment in the form of cash. If the payments are
via cash, the collection department could easily use the cash for another
purposes, do the teeming and lading before it is stored to the CV’s bank
account. Hence, CV Kusuma Jaya suppose to encourage their customer to
pay via bank transfer.
3. CV Kusuma Jaya’s Warehouse does not record the inventory which updated
by Accounting Department only. A preferable point can be taken, where by
making an inventory card which consist information number of the goods had
accepted and or sent from the
4. Warehouse, this will provide more accurate information about the quantity of
the goods in the Warehouse at any time.In addition, the inventory card need
to be reconciled periodically with the inventory in ledger which is made by the
Accounting Department,  in order to improve data control over the inventory
account.